Company Results

Belmond Ltd. Second Quarter 2014 Revenues Up 3%

Total revenue in the second quarter of 2014 was $178.0 million, up $5.1 million or 3% from $172.9 million in the second quarter of 2013. Total hotels revenue for the second quarter was $150.7 million, an increase of $2.7 million or 2% from $148.0 million in the second quarter of 2013.

Total revenue in the second quarter of 2014 was $178.0 million, up $5.1 million or 3% from $172.9 million in the second quarter of 2013. Total hotels revenue for the second quarter was $150.7 million, an increase of $2.7 million or 2% from $148.0 million in the second quarter of 2013. Total hotels revenue growth was driven by a 6% increase in same store RevPAR, partially offset by a $3.4 million decrease in owned hotels revenue as a result of the March 2014 sale of Inn at Perry Cabin by Belmond in St. Michaels, Maryland, and a $0.7 million year-over-year revenue decrease at Belmond Miraflores Park, Lima, Peru, which was closed for renovation from December 1, 2013 through mid-April 2014. Excluding these two properties, total hotels revenue would have increased $6.9 million or 5% year-over-year for the second quarter of 2014.

Total trains & cruises revenue in the second quarter of 2014 was $27.3 million, up $2.4 million or 10% from $24.9 million in the second quarter of 2013 due primarily to an increase in revenue from the Venice Simplon-Orient-Express, largely as a result of a 10% year-over-year appreciation in sterling, and the Company's PeruRail joint venture, primarily as a result of increased tourist demand.

Year-over-year currency fluctuations did not significantly impact the Company's U.S. dollar translation of total revenue for the second quarter of 2014, as the impact of the appreciation of sterling and the euro, up 10% and 5%, respectively, more than offset the impact of the depreciation of the South African rand, Russian ruble and Brazilian real of 11%, 10% and 7%, respectively.

Total adjusted EBITDA was $41.9 million for the second quarter of 2014, an increase of $0.7 million or 2% from $41.2 million in the second quarter of 2013. When comparing second quarter 2014 results to the prior-year quarter, there are several comparability differences: the March 2014 sale of Inn at Perry Cabin, the closure for renovation of Belmond Miraflores Park through mid-April 2014 and the $0.5 million investment in the Belmond brand launch in the current-year quarter. Excluding these items, total adjusted EBITDA for the second quarter of 2014 would have increased $2.9 million or 7% over the prior-year period.

Adjusted net earnings from continuing operations for the second quarter of 2014 were $8.0 million ($0.08 per common share), a decrease of $9.7 million from adjusted net earnings of $17.7 million ($0.17 per common share) in the second quarter of 2013. This decrease is primarily the result of an increase in tax expense owing largely to a change in the Company's profits mix as compared to the prior-year quarter.

John Scott, president and chief executive officer, remarked: “Our overall performance in the second quarter was balanced, with a 7% increase in comparable adjusted EBITDA despite challenges faced by our hotel in Russia. A highlight of our second quarter was the 2014 FIFA World Cup in Brazil, which commenced in the middle of June. We expected great things of Belmond Copacabana Palace, our legendary hotel in Rio de Janeiro, for this highly anticipated event, and the hotel delivered. The benefit from the games also extended to our other Brazilian hotel, Belmond Hotel das Cataratas at the Iguassu Falls. Collectively, these two hotels produced second quarter EBITDA growth of $3.0 million or 88% over the prior-year period.

"Another highlight of the quarter was the strong results of the Company’s owned hotels in Europe due primarily to solid performances by the Company’s Italian hotel portfolio and Belmond La Residencia in Mallorca, Spain. At the same time, our hotel in Russia, Belmond Grand Hotel Europe, St. Petersburg, continued to face several challenges, including the impact of the political situation in Ukraine. We continue to monitor this situation closely but expect a further negative impact in the third quarter. Excluding this hotel, EBITDA for our European hotels in the second quarter was up 16% over the prior-year period. The re-investment in our Italian hotels during their annual seasonal closures, a part of our strategy to improve and extend our core, contributed meaningfully to the region's growth.

“Looking ahead, our forecast for the third quarter of 2014 shows same store RevPAR growth of between 1% and 5% in local currency (3% and 7% in U.S. dollars) over a strong comparative period, for which U.S. dollar RevPAR increased 20% over the third quarter of 2012. For the full year 2014, we are now projecting same store local currency RevPAR growth of between 3% and 7% (2% and 6% in U.S. dollars), a 1 percentage point decrease from our previous full year guidance due in part to continued challenges for our hotel in Russia.”

Company Highlights

Announces agreement to manage The Cadogan hotel in London — On July 8, 2014, the Company announced that it had signed a long-term management agreement with Cadogan Estates Limited to operate The Cadogan, a 64-key hotel in the high-end residential and retail area of Knightsbridge in London, England. The hotel will close at the end of July 2014 to undergo an approximate $48.0 million complete renovation. The fully renovated Belmond Cadogan is scheduled to open in the summer of 2016 with refurbished public areas, a signature restaurant and the reconfiguration of 64 keys to 54 in order to accommodate demand from luxury travelers for larger suites.

Receives global recognition as top hotel brand — On July 2, 2014, Belmond was named one of the world’s top ten hotel brands in the prestigious Travel + Leisure 2014 World’s Best Awards. The 19th annual awards, which are the result of a poll of the magazine's readers, recognize the very best in luxury travel. This significant accolade illustrates the early positive response by travelers to the Company's new brand and should serve to increase awareness of Belmond in the important U.S. market.

Extends core business through the addition of new suites in Sicily — In May 2014, the Company completed six new junior suites at Belmond Villa Sant’Andrea in Taormina, Sicily, increasing the hotel's inventory by 10% to 65 rooms and suites. Carved out of the side of a cliff and located next to the hotel's beachfront swimming pool, these new suites are a good example of the Company's focus on identifying revenue-enhancing opportunities within its existing portfolio to improve and extend its core.

Welcomes new senior management team member and director — During the quarter, the Company completed its search to add further talent to its senior management team by selecting Ingrid Eras-Magdalena to be appointed vice president, global human resources. Ms. Eras-Magdalena has over 20 years’ human resources experience in the hospitality industry and will join the Company on September 22, 2014 from Starwood Hotels and Resorts Worldwide, Inc., where she served as vice president, people development and staffing for the Europe, Africa and Middle East division since 2006.

At the annual general meeting of shareholders on June 30, 2014, Georg Rafael, a long-serving director and a legend in the luxury hotel industry, retired from the board of directors and Roeland Vos was elected a director, continuing the Company's objective of board renewal. Mr. Vos most recently served as president of the Europe, Africa and Middle East division of Starwood Hotels and Resorts Worldwide, Inc. from 2001 to 2013.

Changes corporate name to Belmond from Orient-Express Hotels — Also at the annual general meeting, shareholders approved a change in the Company’s name from Orient-Express Hotels Ltd. to Belmond Ltd. in order to align its corporate identity with that of its primary luxury brand following Belmond's well-received launch earlier this year. The Company completed the final transition to Belmond on July 28, 2014 when it changed the ticker symbol of its class A common shares listed on the New York Stock Exchange from OEH to BEL.

Operating Performance

Owned hotels:

Europe:

In the second quarter of 2014, revenue from owned hotels was $78.2 million, an increase of $3.0 million or 4% from $75.2 million in the second quarter of 2013. Combined revenue growth of $5.8 million from the Company's hotels in continental Europe and the United Kingdom was partially offset by a $2.8 million decrease in revenue at Belmond Grand Hotel Europe. The Company saw particular strength in the quarter from its Italian hotels, with combined revenue growth of $3.6 million or 8% due primarily to an 8% increase in U.S. dollar average daily rate ("ADR"), showing solid growth in a year without the benefit of the Venice Biennale arts festival. Additionally, the Company saw a marked improvement in the performance of Belmond La Residencia, where second quarter revenue grew $1.5 million or 37% compared to the prior-year quarter due largely to an 8 percentage point increase in occupancy. Results for the Company's hotels in continental Europe also benefited from the 5% year-over-year appreciation of the euro. Revenue at Belmond Grand Hotel Europe continued to be negatively impacted by currency depreciation, with a 10% year-over-year depreciation in the ruble contributing $1.5 million of the hotel’s $2.8 million revenue decline. The hotel’s results were also affected by cancellations related to the political situation in Ukraine, increased local competition and softer food and beverage revenue partially as a result of ongoing restaurant renovation works.

Same store RevPAR for owned hotels in the region was up 3% in U.S. dollars year-over-year due primarily to a 6% increase in U.S. dollar ADR. In local currency, same store RevPAR increased 2% over the prior-year quarter due primarily to a 4% increase in ADR.

EBITDA for the second quarter was $29.8 million, an increase of $1.7 million or 6% from $28.1 million in the second quarter of 2013. This increase was the result of EBITDA growth of $3.4 million at the Company's hotels in continental Europe and the United Kingdom, partially offset by a $1.6 million decrease in EBITDA at Belmond Grand Hotel Europe.

North America:

Revenue from owned hotels for the second quarter of 2014 was $37.3 million, down $3.2 million or 8% from $40.5 million in the second quarter of 2013. The decrease was primarily the result of the March 2014 sale and agreement to manage Inn at Perry Cabin, which resulted in the Company no longer reporting the hotel's results in its owned hotels segment but instead recognizing management fees earned in its part-owned / managed hotels segment. Excluding Inn at Perry Cabin, which generated revenue of $3.4 million in the second quarter of 2013, North American owned hotels revenue would have increased $0.2 million year-over-year.

Same store RevPAR for owned hotels in the region, which excludes Inn at Perry Cabin, was up 2% over the prior-year quarter in both U.S. dollars and local currency. A 9% increase in ADR for the region was partially offset by a 5 percentage point decrease in occupancy, which was primarily the result of a year-over-year decline in leisure business at Belmond Charleston Place, South Carolina.

EBITDA for the region was $6.9 million in the quarter, down $1.3 million or 16% from $8.2 million in the second quarter of 2013 primarily as a result of the March 2014 sale of Inn at Perry Cabin. Excluding this hotel, which reported EBITDA of $0.9 million in the second quarter of 2013, the region's year-over-year EBITDA decrease would have been $0.4 million. This 5% decrease in comparable EBITDA was primarily the result of declines of $0.5 million at Belmond La Samanna, St. Martin, French West Indies, due mainly to cost increases related to the appreciation of the euro; $0.3 million at Belmond Charleston Place as compared to the hotel's record-setting second quarter 2013 performance due to decreased leisure business and an increase in benefits costs; and $0.3 million at '21' in New York City due to decreased banqueting business. Partially offsetting these decreases was a $0.6 million year-over-year increase in EBITDA at Belmond El Encanto, Santa Barbara, California, as the property continues to ramp up in its first full year of operations.

Rest of World:

Revenue from owned hotels for the second quarter of 2014 was $33.2 million, an increase of $2.8 million or 9% compared to $30.4 million in the second quarter of 2013. This increase was the result of the strong performances of the Company's two Brazilian hotels due largely to the 2014 FIFA World Cup, which impacted 18 nights during the second quarter. With revenue growth of $2.9 million or 21%, Belmond Copacabana Palace had a record second quarter. Belmond Hotel das Cataratas also achieved its highest second quarter revenue since the Company completed a renovation of the hotel in 2010, with revenue up $1.3 million or 33% over the prior-year quarter. Excluding the impact of the 7% year-over-year depreciation of the Brazilian real, combined revenue for the two hotels would have increased $5.2 million or 29% over the second quarter of 2013.

Growth at the Company's Brazilian hotels was partially offset by year-over-year declines at Belmond Miraflores Park and the Company's Asian hotels. Belmond Miraflores Park was closed for a planned renovation from December 2013 through the middle of April 2014 and, as anticipated, revenue for the hotel declined $0.7 million for the second quarter of 2014 as compared to the prior-year quarter. Revenue for the Company's Asian hotels was down $0.7 million year-over-year primarily as a result of the impact of the media coverage of the political situation in Bangkok, which is an important point of arrival for several of our Asian hotels.

Same store RevPAR for owned hotels in the rest of world was up 24% in local currency and 18% in U.S. dollars. RevPAR growth was predominantly driven by ADR, with second quarter local currency ADR growth of 21% (up 15% in U.S. dollars) largely as a result of the World Cup. Occupancy was up 1 percentage point over the prior-year quarter.

EBITDA in the second quarter of 2014 of $6.7 million was $1.9 million or 40% greater than EBITDA of $4.8 million in the prior-year quarter. Combined year-over-year EBITDA growth of $3.0 million or 88% at Belmond Copacabana Palace and Belmond Hotel das Cataratas was offset by a $0.8 million year-over-year EBITDA decrease for Belmond Miraflores Park due to the hotel’s planned closure and a $0.8 million net decrease in EBITDA for the Company's Asian hotels.

Part-owned / managed hotels:

Revenue in the second quarter of 2014 was $2.0 million, a 5% increase over revenue of $1.9 million in the second quarter of 2013. This increase was primarily attributable to a $0.3 million increase from Hotel Ritz, Madrid, Spain, which had a 9 percentage point increase in occupancy as a result of new sales strategies and continued signs of an improvement in the Spanish economy.

EBITDA for the second quarter of 2014 of $1.8 million was flat to EBITDA for the second quarter of 2013 due primarily to a $0.2 million increase from Hotel Ritz, offset by a decrease in EBITDA for the Company's Peru hotels joint venture as a result of a $0.5 million expense for the Company's share of the joint venture's debt extinguishment costs.

Owned trains & cruises:

Revenue for the second quarter of 2014 was $23.3 million, up $1.6 million or 7% from $21.7 million in the second quarter of 2013. This growth was primarily the result of a $1.0 million increase in revenue from the Venice Simplon-Orient-Express, which benefited from the 10% year-over-year appreciation in sterling, and a combined $0.9 million year-over-year increase from the Belmond Northern Belle U.K. day-train, Belmond Royal Scotsman and Belmond Orcaella, Myanmar. This growth was partially offset by a $0.4 million decrease in revenue from the Belmond British Pullman U.K. day-train, which operated seven fewer trips, including five fewer charters, during the current-year quarter than it did in the prior-year quarter.

EBITDA of $2.5 million for the second quarter of 2014 was in line with EBITDA in the second quarter of 2013, as EBITDA growth from the Venice Simplon-Orient-Express and Belmond Royal Scotsman was offset by EBITDA declines for Belmond British Pullman and Belmond Orcaella. Belmond Orcaella was not yet operational in 2013 for the second quarter, which is a loss-making quarter for the cruise due to the seasonality of this business.

Part-owned / managed trains:

EBITDA for the second quarter of 2014 of $4.0 million was $0.8 million greater than $3.2 million for the second quarter of 2013. This 25% growth was primarily the result of a 25% increase in EBITDA recognized for the Company’s PeruRail joint venture due largely to a 13% increase in passenger train revenue primarily as a result of an increase in tickets sold.

Central costs:

In the second quarter of 2014, central overheads were $7.0 million compared to $6.9 million in the prior-year period, an increase of $0.1 million or 1%.

The Company also incurred $2.2 million of non-cash share-based compensation expense compared to $2.3 million in the second quarter of 2013.

Central marketing costs in the second quarter of 2014 of $1.4 million were $1.2 million higher than the prior-year quarter partially due to $0.5 million of Belmond brand launch expenses incurred in the second quarter of 2014.

Depreciation and amortization:

Depreciation and amortization expense for the second quarter of 2014 of $12.8 million was up $0.6 million from $12.2 million in the second quarter of 2013 as a result of the recent completion of several capital projects.

Interest:

Interest expense for the second quarter of 2014 of $8.2 million was $0.1 million higher than the prior-year quarter expense of $8.1 million.

Tax:

Tax expense from continuing operations for the second quarter of 2014 was $12.5 million compared to an expense of $2.9 million in the same quarter in the prior year. The prior-year quarter tax charge benefited from a deferred tax credit of $3.4 million related to the retranslation of deferred tax liabilities recorded in local currencies due to the depreciation of those currencies against the U.S. dollar. In addition, there is a $6.7 million year-over-year increase in tax expense relating to a change in the Company’s quarterly profits mix primarily as a result of the March 2014 corporate debt refinancing.

Investment:

In keeping with its strategy to selectively re-invest capital in its core assets, the Company invested a total of $20.9 million in its portfolio during the second quarter of 2014, including $4.6 million at Belmond Grand Hotel Europe primarily for the conversion of 19 historic rooms into six signature suites and the renovation of the hotel’s restaurants and meeting rooms; $3.5 million at Belmond Charleston Place primarily for the hotel’s rooms renovation project; $1.7 million at Belmond Hotel Cipriani, Venice, Italy primarily for the renovation of the hotel’s new Oro restaurant; $1.7 million related to the renovation of Belmond Miraflores Park; $1.6 million at Belmond Villa Sant’Andrea primarily for the six new junior suites that opened in May 2014; $1.3 million at Belmond Hotel Splendido in Portofino, Italy primarily for the renovation of several of the hotel’s rooms and suites; and the balance for routine capital expenditures.

Balance Sheet

At June 30, 2014, the Company had total debt (including the current portion and debt of consolidated variable interest entities) of $641.7 million and no outstanding working capital loan balances. The Company had cash balances of $136.8 million (including $3.9 million of total restricted cash, of which $2.0 million was in other assets) at June 30, 2014, resulting in total net debt of $504.9 million compared to total net debt at December 31, 2013 of $503.0 million. At June 30, 2014, the ratio of net debt to trailing twelve-month total adjusted EBITDA was 4.3 times.

Undrawn amounts available to the Company at June 30, 2014 under lines of credit, including the Company’s corporate revolving credit facility, were $101.7 million, bringing total cash availability (excluding restricted cash) at June 30, 2014 to $234.6 million.

At June 30, 2014, approximately 44% of the Company’s debt was at fixed interest rates and 56% was at floating interest rates. The weighted average maturity of the debt was approximately 6.0 years and the weighted average interest rate was 4.5%. The Company had $7.3 million of debt repayments due within twelve months.

* * * * * * * *

BELMOND LTD.

SUMMARY OF OPERATING RESULTS

(Unaudited)

$ millions – except per share amounts

Three months ended

June 30,

Six months ended

June 30,

2014

2013

2014

2013

Revenue and earnings from unconsolidated companies

Owned hotels

- Europe

78.2

75.2

92.7

91.2

- North America

37.3

40.5

75.6

75.0

- Rest of world

33.2

30.4

69.7

71.6

Total owned hotels

148.7

146.1

238.0

237.8

Part-owned / managed hotels

2.0

1.9

1.7

0.9

Total hotels

150.7

148.0

239.7

238.7

Owned trains & cruises

23.3

21.7

34.3

30.9

Part-owned / managed trains

4.0

3.2

5.8

5.3

Total trains & cruises

27.3

24.9

40.1

36.2

Total (1)

178.0

172.9

279.8

274.9

Analysis of earnings

Owned hotels

- Europe

29.8

28.1

21.5

20.2

- North America

6.9

8.2

14.2

14.5

- Rest of world

6.7

4.8

17.5

17.6

Total owned hotels

43.4

41.1

53.2

52.3

Part-owned / managed hotels

1.8

1.8

1.3

(0.2

)

Total hotels

45.2

42.9

54.5

52.1

Owned trains & cruises

2.5

2.5

1.7

1.4

Part-owned / managed trains

4.0

3.2

5.8

5.3

Total trains & cruises

6.5

5.7

7.5

6.7

Central overheads

(7.0

)

(6.9

)

(14.4

)

(15.4

)

Share-based compensation

(2.2

)

(2.3

)

(3.0

)

(3.9

)

Central marketing costs

(1.4

)

(0.2

)

(2.4

)

(0.6

)

EBITDA before gain on disposal and impairment

41.1

39.2

42.2

38.9

Gain on disposal of property, plant and equipment

0.2

—

3.9

—

Impairment

—

—

—

(35.7

)

EBITDA

41.3

39.2

46.1

3.2

Depreciation & amortization

(12.8

)

(12.2

)

(24.9

)

(23.7

)

Loss on extinguishment of debt

—

—

(14.5

)

—

Interest

(8.2

)

(8.1

)

(17.4

)

(15.1

)

Foreign currency, net

(1.3

)

0.9

(0.9

)

3.0

Earnings / (losses) before tax

19.0

19.8

(11.6

)

(32.6

)

Tax

(12.5

)

(2.9

)

(1.9

)

3.3

Net earnings / (losses) from continuing operations

6.5

16.9

(13.5

)

(29.3

)

Discontinued operations

(0.5

)

0.4

(1.2

)

(0.4

)

Net earnings / (losses)

6.0

17.3

(14.7

)

(29.7

)

Net losses / (earnings) attributable to non-controlling interests

0.1

0.2

—

(0.1

)

Net earnings / (losses) attributable to Belmond Ltd.

6.1

17.5

(14.7

)

(29.8

)

Net earnings / (losses) per common share attributable to Belmond Ltd.

0.06

0.17

(0.14

)

(0.29

)

Number of shares – millions

103.73

103.06

103.73

103.04

(1) Comprised of revenue of $175.6 million (2013 - $170.5 million) and earnings from unconsolidated companies of $2.4 million (2013 - $2.4 million) for the three months ended June 30, 2014, and revenue of $278.1 million (2013 - $273.3 million) and earnings from unconsolidated companies of $1.7 million (2013 - $1.6 million) for the six months ended June 30, 2014.

BELMOND LTD.

SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS

Three months ended

June 30,

Six months ended

June 30,

2014

2013

2014

2013

Room Nights Available

Europe

83,541

84,285

127,126

132,257

North America

65,065

70,458

136,435

134,108

Rest of world

93,457

92,274

185,887

183,534

Worldwide

242,063

247,017

449,448

449,899

Rooms Nights Sold

Europe

50,322

52,008

65,994

68,518

North America

44,697

51,252

88,862

92,213

Rest of world

46,414

44,763

103,623

107,581

Worldwide

141,433

148,023

258,479

268,312

Occupancy

Europe

60

%

62

%

52

%

52

%

North America

69

%

73

%

65

%

69

%

Rest of world

50

%

49

%

56

%

59

%

Worldwide

58

%

60

%

58

%

60

%

Average Daily Rate (in US dollars)

Europe

888

837

773

738

North America

422

393

448

428

Rest of world

432

375

417

396

Worldwide

591

544

519

494

RevPAR (in US dollars)

Europe

535

517

401

382

North America

290

286

292

294

Rest of world

215

182

233

232

Worldwide

346

326

298

295

Same Store RevPAR (in US dollars) (1)

Europe

535

517

401

382

North America

290

285

309

307

Rest of world

215

182

245

234

Worldwide

346

327

311

301

Same Store RevPAR (% change)

US dollar

Local

currency

US dollar

Local

currency

Europe

3

%

2

%

5

%

4

%

North America

2

%

2

%

1

%

1

%

Rest of world

18

%

24

%

5

%

17

%

Worldwide

6

%

6

%

3

%

6

%

(1) Same store RevPAR for the three months ended June 30, 2014 excludes the operations of Inn at Perry Cabin. Same store RevPAR for the six months ended June 30, 2014 excludes the operations of Inn at Perry Cabin, Belmond El Encanto and Belmond Miraflores Park.